An $11 fare to drive a passenger fewer than four miles was all D.Y. Kim had to show for his morning's labors.

Kim had spent four hours in a taxicab stand at Baltimore/Washington International Thurgood Marshall Airport on a recent Thursday in mid-August, hoping for a big-money fare to Baltimore City.

And, he was quick to point out, the hotel to which he was taking his passenger offers free shuttle service from BWI.

Not that Kim had reason to expect otherwise these days, with the airline industry's woes exacerbating an already-slow economy. But he still groused what his spot at the front of the cab stand turned up.

"This is terrible. I think this year everything's dropped down," he said. "I'm already retired, so no problem. But some guys have a wife and kids to support, and it's hard for them."

Kim's is not the only pocketbook stressed by the flux in the airline industry. Across the country, airlines are cutting flights and air travel prices are climbing. Airlines, hotels, restaurants and the government lost nearly $29 billion last year due to air travel hassles, according to the Travel Industry Association. With more flight cuts gripping the industry this year -- even BWI's largest airlines, Southwest Airlines and AirTran Airways are scaling back -- the business losses could be greater. At BWI, fewer flights, and fewer people on those flights, have created a ripple effect felt by taxicab drivers, restaurant managers, hotel executives and others who rely on the airport to send business their way.

Many business owners have been forced to find new ways to compete for a dwindling pool of travelers. Boosting customer service, cutting staff, dropping prices and striking new partnerships are some of the ways they are trying to survive. Airport analysts say that while the effect can be damaging in the short-term, vendors who can wait it out still have one of the highest-traffic spots.

"We're at the mercy of the travelers," said J. Michael Sanford, president of the Greene Turtle Franchising Corp. The Greene Turtle sports bar, and other vendors at BWI, are offering lower-priced menu items and creating promotions to buoy sales. "We're all in it to weather the storm, because it's a good business opportunity for us to be here."

Eating on the cheap

Business in July is usually brisk at the Bob Evans restaurant near BWI. But on a recent Thursday, just a few tables were full, indicative of this atypically slow summer, Assistant Manager Joshua Roeder said.

"July for us stunk," he said. "It does seem like it's a little slow. It does seem like people aren't flying as much."

That has forced the restaurant to cut back on staff and the number of hours its employees work. Roeder said he is worried that if the servers are displeased with those changes, they might take it out on the customers. That could put a damper on much-needed repeat business, he said.

Last month was slower for some restaurant operators at BWI, too. Families are cutting back, with fewer trips to places like Disney World, said Mark Russell, director of new store development for Rockville chain Silver Diner.

He had projected that his BWI eatery would make $120,000 a week in July; instead, it's making $100,000 a week.

To appeal to travelers, Russell has made carry-out a big part of the storefront, and now it accounts for 20 percent of his business. In September, the airport diner will offer a new promotion: A handful of menu items available in 12 minutes or less, or they are free. The idea is to win those travelers who think they do not have the time to sit down for a meal.

Meanwhile, some BWI vendors are adding cheaper menu items to drum up sales. Obrycki's Crab House and Seafood Restaurant may introduce some $6 items in the coming months to entice diners who want to spend less, said Co-owner Cheri Cernak. Obrycki's BWI store anticipates making $1.3 million this year, significantly less than the $3 million sales in 2007.

Cernak attributes some of the dip to the sluggish economy and the fact that more restaurants, such as Zona Mexicana, have opened nearby.

But airport vendors say they can only do so much. Big marketing splashes will not go far since no one without an airline ticket can get past security. They cannot raise prices, either. BAA Maryland Inc., which runs BWI's concessions, requires retailers and restaurants to charge the same price at the airport as their other locations.

Room at the inn

Just as restaurants are dishing out fewer plates, hotels are turning down fewer beds.

The Hilton Garden Inn at BWI Airport is seeing fewer travelers during the week, which is usually a busy time for hotel guests in town for business meetings in the area.

Hotel General Manager John Durbin declined to quantify how much business is down, but as a BWI hotel, he said it is subject to fluctuations in the airport's business. In June, about 1.9 million passengers flew through BWI, a 3.3 percent drop from the same month last year.

"This is kind of a precarious thing, you don't know whether it's going to get better from month to month," Durbin said. He budgeted for an increase in occupancy this summer, but business has remained stable if not slightly down from last year.

The hotel has tried to be more aggressive in its marketing and lure more local and regional meetings, which has helped offset some of the drop in occupancy. Local meetings are gaining favor as more companies scale back on air travel, Durbin said.

At the same time, Durbin said he isn't optimistic the hotel business will pick up in the short term.

"We're just cautious going forward, trying to anticipate trends," he said. "You try to hedge your bets, you try to book more group business and do the things that you can. It's just a matter of being a step ahead of the competition."

Occupancy rates at hotels within a five-mile radius of BWI have dropped 4.5 percent this year, according to Smith Travel Research. Revenue per room, a key metric in the hotel industry, dipped nearly 6 percent for BWI hotels.

Connie Del Signore, CEO of the Annapolis and Anne Arundel County Conference and Visitors Bureau, said she believes the hotel dip reflects greater hotel inventory: Anne Arundel County has gained about 1,200 hotel rooms in the past year, about a 13 percent increase.

And that inventory is expected to grow. Another 2,000 rooms are under construction or proposed.

Del Signore said she hopes a new promotion with Southwest Airlines this fall will attract more business travelers to the area.

Southwest will fly a team from the visitors bureau to convene with meeting and wedding planners in Albany, N.Y., and Hartford, Conn. Southwest and Anne Arundel may also develop promotions in those cities' airports.

"We're thrilled," Del Signore said. "If we partner with them, we'll have more people who plan on visiting the market."

In spite of these efforts, some BWI hotel executives, such as Ben Timashenka, general manager of the BWI Westin, are bracing for a slowdown.

Leisure travelers, who account for about half of this business, are not as free-spending these days, and the uncertainty in the airline industry does not help matters.

"Everyone is on edge," Timashenka said.

In the fall, he will reach out to his counterparts at other airport hotels to develop joint promotions and pass along sales leads to one another.

"You need to be as proactive as possible," he said.

The silver lining

While many BWI-area businesses are feeling the strain, high fuel prices, the economy and troubles in the airline industry are boosting other businesses. These include shuttle operators, retailers who count on shoppers with extra time on their hands, and a hotel within a stone's throw of the airport.

High gas prices are prompting some travelers to opt for a shuttle over their car. BayRunner, an Eastern Shore shuttle service, has seen a 50 percent boost in business, company President John Presburg said. The shuttle makes about seven trips a day to BWI and carried about 1,300 people to the airport in July, he said.

It is the same story with SuperShuttle, the nationwide airport shuttle operator. For June, about 39,200 riders headed to BWI on SuperShuttle vans, up from about 31,800 in June 2007, the company said.

Some BWI vendors and nearby restaurants can thank the downturn in the economy for bringing passengers like Mark Patterson, vice president of sales at Baseball Express Inc., to the area. Patterson flies from San Antonio to BWI every Monday and returns on Thursday.

Amid slowing sales, he is traveling more to Baltimore to train sales managers and help the sales team identify business leads at Laurel-based sports equipment suppliers Football America and Cheerleading America. During his stays in Baltimore, Patterson's company spends between $1,500 and $2,000 a week for him to sleep, eat and rent a car.

Patterson stays at Hyatt Place and prefers to eat at G&M Restaurant & Lounge or Olive Grove. "I look for a restaurant with local flavor," Patterson said.

One hotel benefiting from airline industry woes is the 201-room Four Points by Sheraton BWI Airport. The hotel is the only one within BWI's footprint. Consequently, the Four Points' 83 percent occupancy is higher than its neighbors, thanks in part to last minute bookings from flight cancellations, General Manager Kevin Carnes said.

And while BWI vendors say sales are down or less than they anticipated, an airport still offers a chance to expose their brand to millions of passengers without spending a lot of money.

Over the long term, an airport is still an attractive location for retailers, said Pauline Armbrust, CEO of Airport Revenue News, a trade publication in Palm Beach Gardens, Fla. You can expose your product to people from across the country and you can reach business travelers who typically spend more, she said.

The Silver Diner's Russell, for instance, would like to open stores at Washington Dulles International Airport and Philadelphia International Airport. Obrycki's, like Silver Diner, still craves more airport locations.

Sales at another BWI vendor, Fire & Ice, are up 10 percent this year and could grow another 10 percent by the end of 2008, owner Robert Levine said. The BWI jewelry store generates the most revenue in the 12-store chain, pulling in $1.1 million last year, he said.

That doesn't surprise Patricia McNamara. The Phoenix resident travels through BWI six times a year on her way to Long Island and frequently stops at Fire & Ice. On her last trip, she spent $120 on a bracelet. She never shops at airports but makes an exception for this store.